20080916Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 6864
RECElVED
toes SEP l 6 PH 3: '4
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UTiliTIES COMf.~\~stON
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
ROCKY MOUNTAIN POWER FOR A ) CASE NO. PAC-E-08-03
CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY AUTHORIZING )
CONSTRUCTION OF THE POPULUS-TO- ) COMMENTS OF THE
TERMINAL 345 KV TRANSMISSION LINE ) COMMISSION STAFFPROJECT )
)
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Neil Price, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure in Order No. 30597 issued on July 18,2008,
submits the following comments.
BACKGROUND
On April 18, 2008, PacifiCorp dba Rocky Mountain Power ("Rocky Mountain Power")
submitted to the Commission for an Application for a Certificate of Public Convenience and
Necessity (CPCN or certificate) authorizing it to construct a 345 kV Transmission Line, known
as Populus-to- Terminal Transmission Line ("Transmission Line") to be located in Bannock and
Oneida Counties and a new substation to be located in Downey, Idaho, hereinafter collectively
referred to as "the Project."
STAFF COMMENTS 1 SEPTEMBER 16, 2008
On April 25, 2008, Rocky Mountain Power fied an Application for a CPCN, pertining
to the portion of the Project to be constructed within the state of Utah, with the Utah Public
Service Commission. On September 4, 2008, the Uta Commission issued an Order granting
Rocky Mountain's request for a CPCN for the construction and operation of the Project.
APPLICATION
Rocky Mountain's Application states that the Project would extend from an existing
substation located southwest of the Salt Lake City International Airport to the new substation in
Downey, Idaho. In the supporting testimony of Mr. John Cupparo, Ms. Sharon Seppi, and Mr.
Bruce Willams, the Company explains that, due to significant retail load growth over the past
decade and anticipated future load growth, it wil be unable to continue to provide the delivery of
safe, efficient, and reliable electric service to its customers without additional transmission
capacity.
The Company states that the Project is necessary in order to meet load growth, add
significant incremental transmission capacity between southeast Idaho and northern Utah and
strengthen the interconnection to transmission systems feeding Idaho, Wyoming, and the
Northwest in general. The transmission line also fulfills a commitment made by the Company to
increase its transmission capacity by 300 MW from southeast Idaho service terrtory to northern
Utah, referred to as the "Path C Upgrade." Case No. PAC-E-05-08. The Company projects that
the total cost of the Project, including the Utah portion, is approximately $750 milion. The
Company states that the Project would be operational beginning in 2010.
A new substation (referred to as the "Populus Substation") wil be constructed near the
existing Jim Bridger 345 kV transmission line corridor in southeast Idaho near the town of
Downey. A new double-circuit 345 kV transmission line wil be constructed from the Populus
Substation to the existing 345 kV Terminal Substation in Salt Lake City, Utah southwest of the
Salt Lake International Airport. A map showing the route of the Transmission Line is attched
as Exhibit A; minor adjustments to the route may occur during final design. The transmission
line wil also tie into the existing Ben Lomond Substation in Box Elder County, Utah. Initially,
only a 345 kV substation yard wil be developed at the Populus Substation and the existing Jim
Bridger-Borah, Jim Bridger-Kinport, and Ben Lomond-Borah 345 kV lines wil be looped in and
out of the Populus Substation. However, the Populus Substation wil be configured to faciltate
STAFF COMMENTS 2 SEPTEMBER 16, 2008
the addition of planned 345 kV and/or 500 kV transmission lines. The Ben Lomond Substation
and Terminal Substation wil be expanded to accommodate the new 345 kV transmission lines
and termination points.
STAFF ANALYSIS
Staffs review of Rocky Mountain's Application, pursuant to Idaho law, is limited to the
following criteria: 1) whether "the present or future public convenience and necessity require or
wil require construction" of the proposed transmission line and substation; and 2) whether the
transmission line wil "interfere or be about to interfere with the operation of the line, plant or
system of any other public utilty already constructed." Idaho Code § 61-526.
Staff will not address transmission siting issues as par of these comments. While Staff
provides some comment with regard to customer notification and communication during the
alignment right of way and permitting process, we do not evaluate the details of that alignment.
The siting of transmission lines is under the jurisdiction of local city and county governents.
Based on its extensive review of the Company fiing in this case, the Company's IRP, the
Idaho Statute regarding Certificates of Public Convenience and Necessity (CPCN) and other
relevant information, Staff recommends that the Commission grant PacifiCorp's CPCN request.
Project Need
The Company states that the primar purpose of this project is to add significant
incremental transmission capacity between Southeast Idaho and Northern Utah and to fuher
faciltate a stronger interconnection to systems feeding Idaho, Wyoming and the Northwest in
general. The Company specifically cites expected load growth in PacifiCorp's service area of
3 % per year for the next ten years and a need to improve overall transmission system reliability
as justification for the project.
The Company used its 2007 Integrated Resources Plan (IRP) analysis to support its
determination that additional transmission capacity was needed. The need for additional
transmission capacity results from Company assumptions regarding the location of growing load
centers and the type and location of additional resources needed to serve that load. The
Company's 2007 IRP identified Northern Utah as an area of future significant load growth to be
most appropriately served by renewable wind resources located in Wyoming and Idaho.
STAFF COMMENTS 3 SEPTEMBER 16, 2008
Staff reviewed the Company's 2007 IRP in Case NO.PAC-E-07-11 fied in May of2007.
In comments fied in that case, Staff said:
While not endorsing the proposed action plan, Staff believes
that Pacificorp has performed extensive analysis, provided
suffcient opportunities for public input, and that the end result
is representative of the best information available to the
Company at the time of preparation.
Staff went on to make note of the increasing potential impact of various state policies on the
selection of a preferred portfolio. Staff recommended that the Commission acknowledge the
Company's 2007 Integrated Resource Plan and in the Acceptance of Filng document issued on
October 15,2007, the Commission acknowledged the Company's planing process but did not
endorse any paricular element of the plan nor approve any resources acquisition contained in the
plan.
The Company now comes before the Commission requesting a CPCN to construct a
transmission line that was an integral par of the preferred resource portfolio proposed by the
Company in its 2007 IRP. Staff believes that the information used by the Company to select the
preferred portfolio in the 2007 IRP is just as relevant today as it was when the Company made
the selection. In fact, Staff believes that underlying resource costs, state mandated resource
portfolio standards (RPS) that require the Company to acquire renewable resources coupled with
prohibitions and environmental uncertainty associated with coal fired resources make the
Company's 2007 preferred portfolio even more reasonable. Since the preferred portfolio was
selected, Utah loads have continued to grow, Request for Proposals (RFPs) to acquire wind
increasingly point to lower cost wind resources in Wyoming, and transmission between the two
points continues to be constrained during peak periods.
As further justification for the project, the Company notes that The Clean and Diversified
Energy Advisory Committee of the Western Governors Association, the Rocky Mountain Area
Transmission Study (RMATS) group and the U.S. Deparment of Energy National Transmission
Congestion Study have all identified regional and west wide benefits to transmission upgrades in
this area.
Finally, the Company points to other reasons that the transmission project is justified on a
more local basis. MidAmerican Holdings Company recognized the need for improved
STAFF COMMENTS 4 SEPTEMBER 16, 2008
transmission reliabilty by committing to increase transmission capacity between Idaho and
Wyoming as par of its acquisition of Pacificorp. The Company also cites increased flexibilty in
selecting resources from various geographic locations and providing more options to
economically access markets for importing/exporting power. Paricularly in conjunction with
construction of the proposed Gateway transmission project to the northwest.
While Staff does not dispute that additional transmission could provide increased
flexibilty and reliability including benefits to others by improving access to generation resources
in Wyoming, Staff believes that these reasons cited by the Company are highly assumption
driven and too speculative to justify the project on their own. The benefits of improved
reliabilty are diffcult to quantify and reliabilty is always somewhat sacrificed when growing
loads are increasingly served by remote resources without additional transmission. Flexibilty
can be an importt asset but building costly transmission in the hope that remote generating
resources wil be constructed, purchases from extra-regional power markets wil be less costly or
additional transmission lines wil come on line, appears risky.
Therefore, the principal question remains, is construction of a transmission line in
conjunction with resources constrcted, underway or planed necessary to meet growing load.
Staff believes that the additional transmission is necessary given the location of new resources.
The Company selected its transmission upgrade as par of a preferred resource portfolio in the
2007IRP. That portfolio included 2,000 MWs of renewable resources by end of2013. A
significant portion of those renewable resources wil come from wind projects in Wyoming. The
following projects totaling over 500 MW are all under construction or in the final stages of
development:
.Glenrock I (99 MW)
.Glenrock II (39 MW)
.Rollng Hils (99 MW)
.Seven Mile Hil I (99 MW)
.Seven Mile Hil II (19.5 MW)
.High Plains (99MW)
.McFadden Ridge (88.5 MW)
STAFF COMMENTS 5 SEPTEMBER 16, 2008
Staff agrees that transmission between these resources and growing load centers is necessary if
the Company hopes to continue providing reliable service.
To justify its decision to construct the proposed project providing 1400 MW of new
capacity, the Company states in the application and IPUC Data Request 10 that it looked at and
rejected four alternatives which are:
. Alternative 1 - Not to construct new transmission capacity.
. Alternative 2 - Upgrade existing 138 kV transmission lines from Treasureton
Substation in Idaho to Syracuse Substation in Utah.
. Alternative 3 - Construct a new single circuit 345 kV transmission line from new
Populus Substation in Idaho to Ben Lomond Substation in Utah.
. Alternative 4 - Upgrade other existing paths or seek additional transmission
corridors in Utah.
The Company concluded that these alternatives would not provide suffcient capacity to serve
growing load given the location of new resources. The Company also recognized that upgrades
of existing lines would fuher reduce transmission capacity while those lines were out of service
during construction.
CostlBenefit Evaluation
While the Company has estimated the project cost at $750 milion with an anticipated
revenue requirement impact on Idaho of about 3%, it has not requested cost recovery in this case.
Staff recognizes that the Populus to Terminal transmission project is par and parcel of an overall
resource/delivery plan that links wind resources in Wyoming with growing load centers in Utah.
Staff has not attempted in this case to evaluate the prudency of the overall resource plan or the
proposed transmission project that constitutes a significant par of that plan. Project completion
is not scheduled until 2010 and capacity may not be fully utilzed for some time after that. While
the Company has compared the costs of various resource alternatives as par of its IRP on a
preliminary basis, and has evaluated transmission alternatives on an individual basis, the actual
costs subject to recovery from Idaho ratepayers wil not be determined until the project is
completed, costs are fully known and project utilzation is fully quantified.
STAFF COMMENTS 6 SEPTEMBER 16, 2008
Customer Notification
Landowners in both Bannock County and Oneida County who own properties adjacent to
the Transmission Line corridor were directly notified of the proposed project and open house
meetings by an informational flyer that was mailed by Rocky Mountain Power the last week of
December 2007. The open house meetings, intended to present information about the project,
answer questions, and provide an opportunity for property owners to express their concerns to
Company personnel, were noticed in three local newspapers.
The Company has also set up a project specific e-mail address and phone number that is
utilized by people who wish to express their concerns. The Company's website is regularly
updated with project information. When the Company receives a comment or complaint from a
customer, it promptly responds to the customer and addresses their concerns. For example, a
citizen group in the Malad area provided valuable feedback, prompting Rocky Mountain Power
to determine that a portion of the transmission line route could be relocated to lessen the impact
on some of the landowners.
The Commission has received 34 comments and protests regarding transmission line
siting and the project notification process. In addition, six complaints were filed with the
Commission in the belief that the Commission is responsible for regulating the routing and siting
of transmission lines. Most of those individuals objected to transmission lines crossing their
property and expressed frustration with regard to the maner in which Rocky Mountain Power
notified or failed to notify them.
As of August 29,2008, Rocky Mountain Power has received communication from 27
Idahoans regarding the transmission project. While not materially effecting a demonstration of
need for the project or ultimately effecting the Commission's decision on a CPCN, Staff believes
that the process to notify customers of the project and open houses should have occurred earlier
than December 2007. Planning for the project began in 2006 and the months selected for this
endeavor (December/January) was not conducive for public turout. Staff recommends that any
future project of this nature and magnitude include an earlier notification, which wil allow
landowners an opportunity to prepare for and attend the open house meetings. Earlier
engagement between Rocky Mountain Power, County Commissioners, and other elected offcials
would also be beneficial, as the elected officials and the County Commissioners wil be better
prepared to address their constituent's concerns.
STAFF COMMENTS 7 SEPTEMBER 16, 2008
THE UTAH CPCN
On September 4,2008 the Public Service Commission of Utah in Docket No. 08-035-42
issued a Report and Order granting a Certificate of Public Need and Necessity. In its Order
granting the certificate, the Utah Commission noted that no pary to the case opposed
construction of the transmission line and concluded that: "public convenience and necessity does
or wil require the construction and no evidence has been presented to contradict the testimony of
the Company."
STAFF RECOMMENDATION
Staff has thoroughly reviewed Rocky Mountain's Application and related filings in this
case. Staff recommends that the Commission issue a Certificate of Public Convenience and
Necessity for the construction of the Populus-to-Terminal 345 kV Transmission Line Project.
Staff believes that the Project complies with the minimum statutory requirements found in Idaho
Code § 61-526. Staffbases its recommendation upon the following:
· The Project will faciltate transfer of energy from planed and existing generating
resources in Idaho and Wyoming and deliver it to load centers in Utah.
· The Project wil improve the reliability of the currently congested transmission
system by increasing transmission capacity and the number of transmission
pathways.
. The Project will provide flexibilty in accessing the most cost effective resources and
regional markets. It will also provide a platform for adding additional transmission
to increase transfer capacity between east and west control areas in the future.
· The Project wil not conflct or affect the operations of any existing certificated fixed
public utilty providing retail electric service to the public.
Staffs recommendation supporting the issuance of a CPCN should not be interpreted as
an endorsement for any costs incured by the Company for the construction of the Transmission
Line Project. Issues pertaining to the prudency or necessity of those costs for purposes of rate
recovery are wholly outside the scope of our review and recommendation.
STAFF COMMENTS 8 SEPTEMBER 16, 2008
Respectfully submitted this l ~ "'ay of September 2008.
h2~
Deputy Attorney General
Technical Staff: Randy Lobb
TJ Golo
Curtis Thaden
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STAFF COMMENTS 9 SEPTEMBER 16, 2008
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Case No. PAC-E-08-3
Staff Comments
09/16/0S
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 16TH DAY OF SEPTEMBER 2008,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. PAC-E-08-03, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
LISA SYMONDS
ROCKY MOUNTAIN POWER
1407 WEST NORTH TEMPLE
SALT LAKE CITY UT 84116
E-MAIL: lisa.symondsCipacificorp.com
R JEFF RICHARDS
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: jeff.richardsCipacificorp.com
DATA REQUEST RESPONSE CENTER
PACIFICORP
825 NE MUL TNOMAH STE 2000
PORTLAND OR 97232
E-MAIL: datareguestCipacificorp.com
Jof~
SECRETARY
CERTIFICA TE OF SERVICE